Do i put zeros on my schedule C since my arts and crafts business had no expenses and made no money in 2021?

[Silvergriffon]

2021 was a total bust for my arts and craft business. I sold nothing and made/bought nothing.

[ColeenD3]

NO, you would not put zeros on Schedule C, nor would you even file one.

Please see this answer from MichaelMc.

If you have closed the business and have no expectation of filing that particular Schedule C in the future, I would advise you to not file the schedule this year. You can actually delete the Schedule C and all related worksheets, using the procedure below, so that it will not trigger unnecessary questions as you prepare your taxes in future years.

If you expect to continue doing business in the future and simply had a year of inactivity, due to travel or illness, for example, I would advise you to file with zero income. This will retain the continuity of the business for future purposes.

Here's the general procedure for deleting unwanted forms, schedules, and worksheets in TurboTax Online:

• Open your return in TurboTax. (To do this, sign in to TurboTax, and click the orange Take me to my return button.)
• In the upper right corner, click My Account and select Tools.
• In the pop-up window, select Delete a Form.
• Click Delete next to the form/schedule/worksheet and follow the onscreen instructions.
• Repeat, as needed until all the unnecessary forms, schedules, and worksheets have been removed.

Tip:  If trying to remove a schedule that has supporting lists or worksheets, remove those first, then remove the main schedule. Otherwise, the lists and worksheets can make the schedule re-appear

[Silvergriffon]

Thanks,

My business isn't closed  2021 just sucked and I made no money.  Hoping to have a better 2022 thank goodness I have a regular 9-5 to fall back on. Just so I understand since I got 2 different answers. Since I am continuing the business  still file the schedule c and put zero for income section.  So I just leave the rest blank since i didnt buy any office supplies or do advertising or touch my inventory. This is all new to me and I want to do it right my business is just a side hustle that I am trying to make work.

[JamesG1]

Your Federal form 1040 Schedule C has no income and no expenses at all to report?  Are there any assets carried over from last year to be depreciated?  Please clarify.

If you expect to continue doing business in the future and simply had a year of inactivity, due to Covid issues, I would advise you to file with zero income. This will retain the continuity of the business for future purposes.

See also this.

[Silvergriffon]

That is correct no expenses  I only buy supplies when I have a order. No orders due to covid so  I made no money. I make note cards/stationary not big money makers. I have $100 worth of inventory sitting on my shelf. Only bought that it was on sale  No fancy equipment to depreciate unless cardstock and ribbon depreciates. My business isn't fancy no bells and whistles.

[LenaH]

Since you have not closed your business, and just had no activity due to Covid-19, I would advise you to keep the Schedule C empty and file with zero income and zero expenses. As JamesG1 stated above, "If you expect to continue doing business in the future and simply had a year of inactivity, due to Covid issues, I would advise you to file with zero income. This will retain the continuity of the business for future purposes."

@Silvergriffon

[Silvergriffon]

So file the schedule C empty meaning put nothing in it no zeros nothing. And that translates into no income no expenses

[DianeW777]

Yes, that is correct, specifically if you know your business will continue moving forward to 2022 and beyond,.  For this reason all of the assets, if applicable, will continue on and move forward to next year. 

If you have no assets and you do not plan to continue business operations, then you can delete the Schedule C.  You must keep an accurate record of any asset you have used in your business until and unless it is sold or disposed of in any manner.

@Silvergriffon

[BrotherLouie]

So my issue is that my small business didn't do great last year, but I had a lot of expenses, so my Schedule C Line 31 ended up a jaw-dropping zero! The IRS instructions do not consider that possibility. It even shocked me! The forms say to do one thing if it's a profit, and something else if it's a loss, but there's nothing about breaking even. So what do I do now?

[VolvoGirl]

Is zero the right amount for line 31?  Or do you have more expenses that aren't being counted?  You can show a loss.  But zero could be right too.  

If you are not showing a loss on Schedule C.
Some expenses, such as home office or section 179 depreciation can only be used to reduce your schedule C taxable income to zero, and not to create a loss. Excess deductions for these carry over to the next year. And you have to answer yes to both questions about exclusive and regular use, not just one. The area of your home office must be used regularly and exclusively for business to deduct it.

Or you checked the box on 32b saying Some Investment is Not at Risk.